NCLAT Backs NCLT on Jaypee Infra; Suraksha Faces Rs 1,300 Crore Hike

In a significant development for over 20,000 homebuyers, the National Company Law Appellate Tribunal (NCLAT) on Friday upheld Suraksha Realty's bid to acquire the debt-laden Jaypee Infratech, with an additional directive to pay Rs 1,334 crore as compensation to farmers. This decision aligns with the National Company Law Tribunal's (NCLT) March 2023 ruling, aiming to expedite the resolution process while safeguarding the interests of all stakeholders, including homebuyers and the Yamuna Expressway Industrial Development Authority's (YEIDA) claim for enhanced compensation to farmers.

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The Corporate Insolvency Resolution Process (CIRP) against Jaypee Infratech Ltd (JIL) was initiated in August 2017 following an application by an IDBI Bank-led consortium. The NCLT had approved Mumbai-based Suraksha Group's bid for JIL on March 7 last year. However, this decision faced challenges from various parties, including YEIDA, leading to an appeal in the NCLAT.

In its detailed 99-page order, the NCLAT set aside the NCLT's decision regarding YEIDA's claim of Rs 1,689 crores for additional farmer compensation but upheld the rest of the resolution plan. Suraksha Realty is now mandated to pay YEIDA Rs 1,334.31 crore, maintaining parity with other secured creditors.

Suraksha Realty had already committed to paying Rs 1,216 crore towards additional compensation by April 18, with an additional Rs 118.31 crore to be paid following the outlined timeline and ratio. This payment structure is part of Suraksha's final resolution plan, which includes offering more than 2,500 acres of land and nearly Rs 1,300 crore through non-convertible debentures to bankers. Furthermore, Suraksha has pledged to complete all pending flats within the next four years.

The lenders of JIL submitted claims amounting to Rs 9,783 crore. The NCLAT's decision marks a crucial step towards completing over 20,000 housing units in various stalled projects across Noida and Greater Noida. A monitoring committee established by the Interim Resolution Professional (IRP) is actively overseeing the swift implementation of the resolution plan.

JIL was one of the initial 12 companies identified by the RBI for insolvency proceedings directed by banks. During the fourth bidding round in 2021, Suraksha Group emerged victorious with a vote share of 98.66%, narrowly surpassing state-owned NBCC. The CoC comprises around 12 banks and over 20,000 homebuyers with voting rights.

The journey to this resolution has been complex and contested. Initial bids from Suraksha and NBCC were rejected in earlier rounds, leading to a Supreme Court directive for a fresh bidding process exclusively between these two entities in March 2021. This directive culminated in Suraksha Realty's successful bid, marking a new chapter in resolving Jaypee Infratech's insolvency while addressing the concerns of thousands of affected homebuyers.